A subsequent stored credential transaction is a card payment that uses a stored credential after the arrangement has been set up. Card network rules divide stored credential use into an initial stored credential transaction, in which the cardholder agrees to have their details stored and often authenticates, and every later payment, which is a subsequent transaction.
Subsequent transactions come in two kinds. A cardholder-initiated transaction happens when the customer starts the payment, for example by choosing a saved card at checkout. A merchant-initiated transaction happens without the customer's involvement, such as a subscription renewal, an instalment or an automatic top-up. Merchants flag each subsequent payment with indicators and a reference to the original transaction, often a network transaction identifier. Correct flagging helps approval rates and, in Europe, lets merchant-initiated payments proceed outside strong customer authentication, since the cardholder authenticated at the start.